The Morning Call
12/13/21
The
Market
Technical
The
S&P bounced off its 100 DMA---as one would expect in a strong market. That
likely means an imminent challenge of the upper boundary of its recently reset
short term trading range. If successful, the Santa Claus rally will be alive
and well.
On
the other hand.
TLT traded down last
week (rates up), but (1) it is still in very short term uptrends off its March
and October lows and (2) remains above both DMA’s. This is supportive of the
notion that inflation will not be the problem many think but rather it is that ‘Powell
waited too late to get hawkish and now the Fed will be tightening into a weaker
economy---thereby making it even weaker.’
GLD
was flat on the week. Like the long bond, it is not really trading like investors
are worried about inflation. I have put in the boundaries (red lines) of what
looks like a developing pennant/flag formation. That suggests the gold will
trade in an ever narrowing price range until it breaks up/down which would then
be indicative of future price direction.
The dollar was also
directionless. But longer term, its pin action is more indicative of a
deflationary/noninflationary environment versus an inflationary one.
Friday in the
charts.
Fundamental
Headlines
The
Economy
Review of Last Week
The US stats were negative
last week as were the primary indicators (two negative, none positive). Overseas,
the data were overwhelmingly negative, putting to rest any doubt that a
recovery was in sight.
My take on the
economy remains unchanged---it is struggling to grow, hampered by increasingly
irresponsible monetary and fiscal policies, getting no support from the global
economy and threatened by seemingly mounting inflationary forces---though the Markets
continue to question the latter point.
US
International
November
German PPI came in tat 1.3% versus estimates of 1.1%.
Other
News on Stocks in Our Portfolios
CVS Health (NYSE:CVS) declares
$0.55/share quarterly dividend, 10%
increase from prior dividend of $0.50.
What
I am reading today
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